The
Small Business Administration (SBA) has
announced that it is withdrawing a proposed regulation it
published on March 19, 2004, that would restructure small
business size standards. Instead, SBA plans to issue
an Advance Notice of Proposed Rulemaking to obtain more
information and data before deciding what further actions
it should take, if any, to restructure small business size
standards.
The
SBA action came about after the American Association
of Meat Processors and other trade associations
representing small and very small businesses told the Agency
that the proposed rule would remove the protections that
very small businesses enjoy from the Small Business Administration.
The
regulation from SBA proposed to simplify size standards
by establishing number of employees as a common standard
for all industries, and by reducing the number of individual
size standard levels from 37 to 10. According to SBA,
the proposed rule also included several other revisions
to simplify the size standards.
AAMP
was concerned about the new rule because it would have expanded
the maximum size of small business from 500 to 1500 employees.
That is not "small business." It
would have set the minimum size standards for small businesses
at 50 employees. AAMP and other small business groups
explained that there are large number of what could be called
"very small businesses" that have fewer than 50
employees. In fact, many have fewer than 10 employees.
While SBA claimed that businesses with fewer than 50 employees
would automatically be considered "small," a legal
interpretation of the new proposal would have put businesses
with less than 50 employees in no size category at all.
Bernie Shire, AAMP's Director of Legislative &
Regulatory Affairs, attended several SBA Small
Business Size Standards meetings and expressed the Association's
concerns about the plan. This plan was unsatisfactory
to AAMP and other small business representatives who expressed
doubts and criticisms about the SBA proposal.
Because
of the large numbers of comments SBA received about the
issue, the Agency plans to publish the ANPRM, which is a
very general indication that it plans to engage in rulemaking
at some point in the future. As part of an Advance
Notice, the Agency will ask questions and try to collect
additional information in order to review and respond to
the issues raised by comments to the rule. Although
some comments supported parts of the SBA proposal, many
comments, including AAMP's, raised concerns about SBA methodology
for developing the proposed size standards, the inpact the
proposed size standards will have on existing small
businesses,
the determination of the employee size of a business, and
SBA's proposed overall approach to simplifying the size
standards.
Further
review of these issues may result in substantive changes
from tghe proposal, SBA said. The Agency also committed
itself to issuing a new proposed rule prior to final rulemaking,
and insuring that AAMP and other representatives of small
businesses have sufficient notice and opportunity to comment
on such changes. |
